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Relief for certain employers claiming section 45R credit, health insurance

U.S. small business health care tax credit, section 45R

The IRS today released an advance version of Notice 2018-27 that provides relief with respect to the credit under section 45R (i.e., the small business health care tax credit).

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Notice 2018-27 [PDF 48 KB] provides relief for “eligible small employers” that claimed a credit under section 45R for all (or part of) the 2016 tax year (or claimed the credit for all or part of a later tax year), but the employer was not able to offer employees a “qualified health plan” (QHP) through a “small business health options program” (SHOP) exchange because the employer’s principal business address is in a county where a QHP through a SHOP exchange is not available.

Today’s notice provides that such employers may calculate the credit for the subsequent portion of the credit period by treating health insurance coverage provided for that portion of the credit period as qualifying for the section 45R credit if the coverage would have qualified for the credit under the section 45R rules applicable before January 1, 2014.

Notice 2018-27 includes examples to illustrate this guidance. 

Read a related IRS release, IR-2018-108

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